TMI Blog2017 (8) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... s a part of the same series of transaction of sale of seating system. The sale cannot be segregated. It is also not the case that the said tools are provided by the customer / buyer. The design and tools are prepared by the applicant to enable the applicant / vendor to manufacture seating systems. The development charges for design and tooling and price of seating system is artificially being segregated to avoid payment of sales tax. Without payment of designing and tooling cost, the applicant would not part with the seating system. The definition of “purchase price” will have to be read in conjunction with the “sale price”. The production / manufacture of the seating system is only on the basis of the said mould which is designed. Without the said mould, the seating system could not be manufactured. The said mould is retained by the vendor. The said mould cannot be used for any other purpose. The development charges for the mould is agreed to be charged and paid as a part of the contract of supply of seating system. The development charges for designing and tool have inescapable bearing on the delivery of the seating system and, therefore, they will have to be held as part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... components thereof. The applicant was assessed for a period from 01.04.1998 to 31.03.1999. While assessing the applicant, the assessing authority has taxed the cost of designing and tooling received by the applicant from his purchasers, which is stated to be on account of designing and for the purpose of getting the moulds manufactured from his suppliers. This amount was held by the assessing authority as an amount of sale price and tax was levied on it. The Commissioner of Sales Tax (Appeals) confirmed the said order of the Assessing Officer. The applicant was also assessed for the period from 01.04.1997 to 31.03.1998. For the said year also, the designing and tooling cost shown by the assessee was considered as sale price. The said order was confirmed upto the Tribunal. 6. The following question has been referred to this Court for its decision by the Tribunal. (i) Whether on the facts and circumstances of the case, the Tribunal was justified in law in holding that designing charges and tooling cost reimbursed to the applicant by its customer forms part of sale price as defined u/s.2(29) of the Bombay Sales Tax Act, 1959? 7. Mr. Jetly, and Mrs. Nikita Badheka, learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific provision for inclusion of amortized cost while arriving at the assessable value. But there are no such provisions in the Sale Tax Act. The designing and moulds are used over several years. The consideration amounts received by way of partial reimbursement from the buyers can in no way form part of the sale price. The learned Counsel to substantiate his contention relies upon the decision of the Apex Court in a case of Moriroku UT India (P) Ltd. Vs. State of Uttar Pradesh, (2008) 224 ELT 365 so also, on the another judgment of the Apex Court in a case of Ts Tech Sun (India) Ltd. Vs. State of Uttar Pradesh Ors., (2008) 15 VST 559. The learned Counsel also relies on the judgment of this Court in a case of Additional Commissioner of Sales Tax, VAT III, Mumbai Vs. Sehgal Autoriders Pvt. Ltd., (2011) 43 VST 398. The learned Counsel further places his reliance on the judgment of this Court in a case of Commissioner of Sales Tax, Maharashtra State, Mumbai Vs. Kolsite Industries, (2013) 61 VST 23 and in a case of Commissioner of Sales Tax Vs. M/s.Page Point Service (P) Ltd., Sales Tax Reference No.3 of 2005, dated 9th September, 2014. 10. Mr. Sharma, Mr. Sonpal and Ms. Jyoti Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by way of debit note or invoice, it will be the consideration towards sale / purchase of goods / components and, therefore, liable to sales tax. The learned Counsel submits that in case of Moriroku UT India (P) Ltd., referred to supra, the Apex Court was considering the question whether amortization, cost of tooling was includable in the sale price as in the Excise duty. The Apex Court held that the scheme of the Excise Act is different. In the said case before the Apex Court, the moulds in question were owned by the buyer / customers so that he could get the auto components made from the moulds. In the present case, the applicant is the owner of the moulds and makes them / rectifies them for specific purpose and charges the same to the purchasers of making seating systems. Thus, the aforesaid case does not help the applicant. The learned Counsel relies on the judgment of this Court in a case of SunNSand Hospital Pvt. Ltd. Vs. State of Maharashtra, (1969) 23 STC 507. Another judgment of the Apex Court in a case of EID Parry India Ltd. Vs. Asst. Commissioner of Commercial Taxes, (2000) Vol.II, SCC 521 and the judgment of the Maharashtra Sales Tax Tribunal in case of M/s. Guest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing is a part of the same series of transaction of sale of seating system. The sale cannot be segregated. It is also not the case that the said tools are provided by the customer / buyer. The design and tools are prepared by the applicant to enable the applicant / vendor to manufacture seating systems. The development charges for design and tooling and price of seating system is artificially being segregated to avoid payment of sales tax. Without payment of designing and tooling cost, the applicant would not part with the seating system. The definition of purchase price will have to be read in conjunction with the sale price . 13. The production / manufacture of the seating system is only on the basis of the said mould which is designed. Without the said mould, the seating system could not be manufactured. The said mould is retained by the vendor. The said mould cannot be used for any other purpose. The development charges for the mould is agreed to be charged and paid as a part of the contract of supply of seating system. The development charges for designing and tool have inescapable bearing on the delivery of the seating system and, therefore, they will have to be held as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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